Council leader issues challenge over ‘unfair’ funding reductions

The Leader of Leeds City Council Councillor Keith Wakefield has challenged the government to tackle “the clear inequalities and unfairness” in reductions to council funding following today’s national public spending review.

Further grant reductions of approximately 10 per cent for local government were announced today for the period leading up to March 2016, with the likelihood of additional reductions to follow leading up to the end of the decade.

This follows on from reductions of £200 million which Leeds City Council, the second-largest local authority in England, will have made over a three-year period by March 2014. That period has seen significant decisions taken in terms of stopping, reducing or altering a range of council services and how they are delivered.

Leader of Leeds City Council Councillor Keith Wakefield said:

“While we were expecting to see another 10 per cent cut in our grant funding as the government’s austerity measures continue, that doesn’t make it any easier in terms of continually taking significant chunks out of public finances and still expecting core services to be delivered.

“We have done all we can since these reductions began to work within our means but with a clear priority of working as hard as we can to protect key services for our most vulnerable members of society. The decisions we have faced along the way have been far harder than any of us imagined and with more reductions to come clearly many more painful decisions are going to have to be made.”

As part of a review into the effects of council funding reductions, capping council tax and changes nationally to welfare reform, business rate collections and the introduction of the New Homes Bonus scheme, increasing evidence is emerging that areas outside London and the South East are being significantly disadvantaged.

Figures released this month by the Special Interest Group of Metropolitan Authorities (SIGOMA) revealed the effect of the changes between 2010 and 2012 amounted to a reduction per person in Leeds and the wider Yorkshire and Humber region of approximately £140. This is almost double the national average for England of approximately £80, and is in stark contrast to an overall funding increase in London of approximately £45 per person.

SIGOMA is also forecasting that by 2017-18 the cumulative impact of all the various changes will be a total funding reduction of £2.7billion across the Yorkshire and Humber region – or around £502 per head of population. This compares to an equivalent of £352 per head in London and £256 per head in the wider South East.

Commenting on the figures Councillor Wakefield added:

“These figures are clearly a cause for concern as they indicate in inherent unfairness in the reality of the financial position with the effect of actually increasing inequality between affluent and lesser well-off areas rather than reducing it.

“We also have major concerns that things like the New Homes Bonus, capping council tax and the new system of business rates collections benefit better-off areas as their starting positions with higher house prices and stronger local economies are much better than poorer areas, so I would call on the government to look very carefully at the real effect these changes are having.”

Notes to editors:

For more information on the Special Interest Group of Metropolitan Authorities (SIGOMA) and to see their report ‘A Fair Future ?’ released on June 11 2013, visit the website at www.sigoma.gov.uk/

The Local Government Yorkshire & Humber (LGYH) spending review briefing can be viewed at www.lgyh.gov.uk/dnlds/Y&H Councils 26 June Spending Round briefing - final.pdf